Showing posts with label Enterprise Ireland. Show all posts
Showing posts with label Enterprise Ireland. Show all posts

Monday, May 30, 2016

30/5/16: On-shoring Russian start ups into Ireland


My comment for the Irish Independent on some aspects of the reported increases in Russian tech start ups presence in Ireland: http://www.independent.ie/business/technology/russian-advance-into-irish-tech-sector-facilitated-by-bonoenda-double-act-34754317.html.


Must add that the EI are doing excellent job in Russian marketplace in sourcing some really exciting business development opportunities and providing huge support for Irish companies exporting into the market.

Also, note: Ireland Russia Business Association has merged with i-Cham at the beginning of 2016.

Tuesday, September 23, 2014

23/9/2014: EI Conference: Domestically-Anchored Globally Open Entrepreneurship


Yesterday, I was asked to say a few words on the challenges and opportunities facing Ireland's economy in the near term future for the Annual Conference held by the Enterprise Ireland. Here are my comments.

"Ladies and Gentlemen,

I would like to thank you for this opportunity to speak to such a distinguished group of professionals who represent the organisation that is responsible for helping Irish indigenous enterprises to grow, develop new markets and increase their value added to the economy.


Global economic environment and Ireland

Let me start by briefly outlining the global economic environment in which Ireland operates today, focusing on both the immediate challenges and opportunities in the next 12-24 months, as well as further afield, into 2017-2020. It is worth stressing beforehand that opportunities and challenges go hand-in-hand and should not be viewed as opposing concepts. An opportunity not pursued is a challenge unmet. A challenge met is an opportunity pursued.

Firstly, analysts’ forecasts generally agree that the global economy is currently moving toward the post-crisis growth trend. The worst of the Great Recession is over, but pockets of structural weaknesses and real pain of economic displacement remain.

Our two major trading partners: the US and the UK are
Delivering rates of growth consistent with those at or slightly below the pre-crisis averages of 2.5-3%
But, this growth is still excessively reliant on monetary policy supports, rather than investment, productivity expansion, external trade growth and/or domestic consumption.
The problem of private and public debt overhang still looms, like a dark shadow, over both economies, presenting a risk of a slowdown in the rates of growth toward 2%.
These risks are even more material in the context of potential effects of the monetary policy tightening that the markets currently expect to take place some time in Q2-Q3 2015.

In the euro area, growth is showing some promise of a fragile acceleration starting with Q3-Q4 2014 and into H1 2015.
However, the rates of growth achievable in Europe remain below the already less-than-impressive pre-crisis trends.
Again, looking at consensus forecasts, we can expect growth around 1.2-1.5% in 2015, rising closer to 2% in 2016.
This assumes no significant adverse shocks from either external sources or from those originating in the euro area.
As with the US and UK, lack of investment, slow productivity growth, and debt drag on consumption represent the biggest challenges alongside fragmented financial markets and sovereign debt bubble that is putting a superficial shine on the dire state of public finances.
As with the US and the UK, growth is still reliant on monetary accommodation and is subject to significant forward risks once the accommodative stance by the ECB is reversed in time.

In the rest of the world:
Commodities dependent economies of Australia and Canada are facing significant risks of unwinding large asset bubbles and economic imbalances built up in boom years. Australia is more vulnerable here than Canada, both in terms of the extent of the bubbles in its domestic economy and its exposure to the slowdown in global demand for commodities, especially to downward pressures in demand coming from China.
Amongst BRICS, Brazil, China and Russia are facing structural pressures - all arising from different driving factors, but all substantial and extremely dangerous to regional and global growth prospects.
Brazil is in a recession and is running out of the road finding sufficient credit supply sources to continue funding public investment boom that sustained the economy.
China is facing a gradual de-acceleration of growth toward 5-5.5% per annum, in a 'good' or ‘benign’ scenario, and is nursing a substantial risk of a sudden break on growth if the investments bubble collapses rapidly.
Russia is amidst a geopolitical turmoil surrounding the Ukrainian crisis, but below these immediate concerns, structural growth slowdown is working to push post-crisis longer-term growth rates closer to 2-2.5% per annum.

Overall, we are looking at the global growth rates in the region of 3-3.5% and advanced economies growth rates around 1.5-2.5%.

Ireland’s position in the global environment currently represents an outlier. Stripping out superficial boost to growth in H1 2014 achieved primarily via reclassifications of the National Accounts, our economy is, at last, showing some changes in the previous post-crisis trend. Prior to 2014, our economic growth dynamics could be characterised as flat-lining with some short term volatility around near-zero growth trend. In more recent months, we are witnessing a gentle uplift in the flat trend, which is most certainly a heart-warming experience. Much of the positive momentum today, just as positive growth supports over recent years (since at least 2011) is down to our exports performance, especially in the indigenous sectors. This performance, strong as it may be, is only partially offsetting the negative trends in multinationals-supported exports of goods (the ‘patent cliff’) and is largely obscured in the national accounts by the superficial boom in MNCs-driven ICT services exports. Nonetheless, given much higher employment and national income intensities of indigenous exports, this domestic exports growth is one of the core drivers, in my view, of the improvements in Irish economy.

Looking beyond 2014, we are likely to see continued upward momentum in the Irish economy, albeit still at subdued rates. Growth of 2.5-3%, once we strip out changes in the National Accounts methodology is possible for 2015 and 2016, should we stay the course on fiscal consolidation and reforms, and assuming we are not heading for a new credit and real estate investment bubble. Trade prospects for Irish exporters should remain relatively robust, but rates of growth in our exports to our traditional partners are likely to come under some pressures, while our exports penetration into new markets are at the risk due to the factors mentioned above.

Global trade will suffer in the 'slow burner' global growth environment. Margins are likely to fall, growth is likely to slow down or remain capped at around 3.5%, and the process of trade regionalisation will accelerate, in part driven by higher volatility in the exchange rates, regionalisation of financial services and credit markets, and by on-going shifts in global supply chains. All of the above factors will present significant challenges for our indigenous exporters.

However, the said challenges will also present some significant opportunities for Ireland. And in the longer term, gradual unwinding of the debt overhang in the advanced economies over 2015-2020 will strengthen both the traditional trade channels from Ireland into North American and European markets, while continuing to open new channels to middle income economies of Asia-Pacific, Latin America and BRICS.


What does addressing these challenges and capturing the related opportunities require from the Irish perspective?

The key issues, both on the threat side and in terms of opportunities, over the next 2-5 years will be the following:

1) Shifting economy toward more intensive indigenous growth. Currently, shares of exports and domestic consumption supplied by domestic producers are insufficient to address the threats to Ireland's FDI-based development model. In simple terms, Ireland needs to replicate the successes in the area of FDI, delivered over recent decades with the help of IDA, in a new area, the area of driving up indigenous firms growth and creating, attracting, retaining and enabling a new economy in Ireland: economy based on high quality human capital, world class open model of entrepreneurship, and increased focus on high value added strongly differentiated activities.

2) This challenge is coincident with tax regime reforms that started with G20 and G8 push last year and will continue, in my opinion, beyond the OECD's "Action Plan on Base Erosion and Profit Shifting” that will be unveiled in 2015.

3) Parallel to these, regionalisation of trade is shifting large-volume supply chains closer and closer to end-users. This dis-favours Ireland as a basis for real activity and requires addressing this risk by increasing our product/service differentiation.

4) Related to the above, there is an urgent need to focus on increasing value added in our indigenous agricultural, manufacturing and services sectors, both for domestic markets and exports. So far, we have pursued an early stages development strategy to deliver competitiveness - a strategy of wage moderation. This is driving down domestic demand, but also capping our ability to Create, Attract, Retain and Enable a deeply integrated base of top quality human capital. The result of racing to the bottom in wages costs is holding back indigenous innovation, but also the rate of adoption of innovation and productivity growth in the MNCs and larger indigenous enterprises sectors, reducing quality of production, specialisation and supply in the public and private sectors. It is also supporting growth in wealth inequality and suppresses our economy's ability to meet future challenges mentioned earlier. Ironically, wages competitiveness is also creating huge imbalances in the stock of human capital in Ireland, promoting accumulation/concentration of human capital in firms with superficially high (tax arbitrage-supported) productivity MNCs and restricting flow of human capital to indigenous innovators.

5) A major opportunity, yet to be fully tapped, is presented by focusing on an open entrepreneurship model that favours high value added manufacturing and internationally traded services. We are still less active in the global race for entrepreneurial talent than we should be. And we are lagging in projecting Ireland as thought- and policy-leader in this space. We must make Ireland synonymous with entrepreneurship and openness, not with tax arbitrage opportunities. And we must make Ireland’s ‘brand’ visible to would-be entrepreneurs, investors and trading partners around the world.

6) Related to the point above, there are multiple opportunities open to Ireland to compete more aggressively in developing an economy based on value added through user-experience and industrial design, product and service innovation, creativity and, yes, the perennially talked-about R&D. Ireland lags in presence in the world markets in terms of recognisable brands, products, end-user services that are ambassadors for this economy's productive capacity. With exception of Ryanair, Kerry Group and a handful of others, like Dairymaster, too few of our companies have direct reach into global supply chains with offers that are differentiated sufficiently to withstand regionalisation of trade. The added risk arising from the lack of defined differentiation for our producers in the global markets is the added exposure to the exchange rates volatility and thus to the monetary policy shifts that are likely to come over the next 12-24 months. It is heartening to know that Enterprise Ireland's work has been and remains one common support base for the majority of our most successful companies. But it is depressing to know that our policies on migration, taxation, trade facilitation, R&D and enterprise investment remain focused more on FDI and the adjoining sub-sectors, such as ICT Services, and not on a consistent building up of the entrepreneurship and human capital bases here.

7) Last, but not least, we are facing a continued challenge of growing successful early stage enterprises beyond the tipping point of EUR10-15 million revenues. Scaling up of Irish indigenous firms is neither sufficiently supported nor incentivised by our tax systems, equity and debt markets or by our policy frameworks. Hence, too many of successful Irish early stage companies are prematurely terminated via sales with a resulting loss of Irish 'brand' identity in global marketplaces. This also induces unnecessary volatility in the domestic markets for skills, talent and know-how.

The above list of 7 point is by no means exhaustive, but the key, unifying point of the above opportunities and challenges is singular: Ireland needs to move to a more domestically-anchored, globally open model of enterprise based on high value added outputs generation.

More open system of entrepreneurship and a greater focus on actual productivity, higher levels of products and services innovation, design and creativity are becoming the differentiators for our competitors, like Singapore, Hong Kong, Korea, Chile, the Netherlands, Switzerland, Belgium, Sweden, Denmark, Austria and even the UK and Germany. The same drivers are also being actively embraced by the newcomers to this competition, such as UAE, Slovakia, Estonia and others.


What does the above mean in practical policy terms? 

How do the above challenges and opportunities translate into tangible actions by the Government and the enterprise support agencies, such as Enterprise Ireland?

We, economists, usually talk in terms of 'first best' policies – policies that are optimal from the point of view of economic efficiency – neglecting political and social dimensions of the policies. I do not intend to break away from this tradition. But some of the policies suggestions I put forth here are currently feasible, and more importantly, the objective of achieving a more entrepreneurship-driven and value-added growth is now simply imperative.

Firstly, we need to open up our migration system to entrepreneurs. Not just the so-called identifiable high-potential entrepreneurs, but to a wider range of entrepreneurs.
This means not only issuing more residency permits for entrepreneurs coming from abroad and issuing them faster.
It also means more actively recruiting entrepreneurs from the ranks of our foreign and domestic students and by projecting our thought leadership in this area worldwide.
And it means making entrepreneurs and human capital residency here more meaningful, more closely integrated with the open-borders policies of the EU, and more reflective of the needs of modern commerce for travel, cross-border cooperation and work.

Secondly, we need to move Ireland into the position of being extremely visible internationally in the space of creating, attracting, retaining and enabling entrepreneurs and key talent. We lack international thought leadership in this area to identify this economy and society with pro-entrepreneurial culture and ambitions and not tax arbitrage opportunities.

Thirdly, we need to enhance dramatically entrepreneurial skills training and supports.
Enterprise Ireland already does very important work here, but the scale of its programmes can and should be expanded.
To free resources for more specialist, high-level training and supports, we need to move more general training into our education system. We need to start giving our children basic entrepreneurial skills earlier in their lives and provide tangible supports for younger entrepreneurs coming out of our schools, colleges, ITs and universities.
We need to clearly and visibly position Ireland as a platform for trading into the EU and North American markets for entrepreneurs from outside the EU, not just for established MNCs. Again, positive experiences of IDA (working with the MNCs) and Enterprise Ireland (working with numerous indigenous exporters) are a great encouragement and a good foundation to build upon.
But, as mentioned already, our thought leadership in this area is still lagging. And the scale of our programmes remains too shallow and too narrow to-date to deliver a game changing shift in our entrepreneurship support systems.
To compete in global markets, we will need active programmes to coach and nurse foreign and domestic entrepreneurs and SMEs on how to access foreign markets with their goods and services.
But we will also need programmes facilitating foreign entrepreneurs integration into the Irish system: from simple supports in terms of accessing basic services here, to tax supports, to legal supports and so on.

Fourthly, we need to drastically revamp our systems for accessing development and trade finance funding. We had volumes written about this in recent years by the Irish Exporters Association and other organisations and indeed by the analysts, like myself. And the Government has reacted positively to some of the proposals, despite the funding difficulties faced by the Exchequer. But, the proverbial carriage is still stuck in the same puddle of dysfunctional banking system and equity markets.

Fifthly, we need to stop penalising self-employment and sole-proprietorship in terms of income taxation and start rewarding early stage entrepreneurial endeavours. Our current model is "Higher Tax for Lower Benefits" and it is rewarding pursuit of PAYE job security and penalises pursuit of enterprise. An alternative currently on the table is a model of "Higher Taxes for Similar Benefits" which will continue to do basically the same injustice to early stage entrepreneurs. Addressing this imbalance between risk-adjusted returns to entrepreneurship and PAYE employment we need to eliminate self-employment penalty and streamline the system of tax compliance for the self-employed.

Sixth, we need to re-couple domiciling of innovation and use of innovation at business level. This applies to the MNCs trading from here, but also to Irish firms. The levels of innovation in our economy are still insufficient. The levels of meaningful utilisation of innovation, R&D and IP in this economy are still below where we would like to see them. We need to create a favourable regime for the firms that both on-shore innovation into Ireland for IP purposes, and deploy it on the ground here. This is tricky, I admit. But it is necessary.

Seventh, growth in the value-added of exports of indigenous firms cannot be contemplated in the environment where we are promoting volumes of sales over value, as, for example, in some agricultural sector outputs. We have to relentlessly drive up margins on our goods and services by pursuing higher valuations for our goods and services, even when such a drive implies increased business and investment risks.


Once again, the above are hardly an exhaustive list of things that must be done for Ireland to succeed in increasingly more competitive global environment.

The key themes that permeate the above remain, however, the same as before: Ireland needs to move to a more domestically-anchored, internationally open model of enterprise based on high value added outputs generation.

More open system of entrepreneurship and a greater focus on actual productivity, exponentially higher levels of products and services innovation, design and creativity, and more aggressive transition of enterprises to higher value added production are becoming the real differentiators for our competitors.

We must lead them, not follow.

Wednesday, June 18, 2014

18/6/2014: Tech Start Ups in Russia: Some Facts, Some Hearsay

An interesting article on Russian tech start-up scene: http://thenextweb.com/insider/2014/06/17/startups-russia-government/ Some of it is true, some is hearsay...

If you want some added factual insights: few slides from my recent presentation at Enterprise Ireland:





Thursday, December 5, 2013

5/12/2013: Irish Services Index, October 2013

So Services PMIs are booming… they are positively booming…


…while in the real world, per CSO:

"The seasonally adjusted monthly services value index decreased by 1.4 % in October 2013 when compared with September 2013 and there was an annual decrease of 1.2%."

M/m on September 2012:

  • Accommodation and Food Service Activities (+1.6%) 
  • Wholesale and Retail Trade (+0.8%) 
  • Professional, Scientific and Technical Activities (-6.0%), 
  • Other Services Activities (-3.5%), 
  • Transportation and Storage (-2.9%), 
  • Information and Communication (-2.5%) and 
  • Administrative and Support Service Activities (-0.3%) 

On an annual basis to October 2012:

  • Administrative and Support Service Activities (+15.4%) 
  • Information and Communication (+0.9%) 
  • Professional, Scientific and Technical Activities (-14.3%), 
  • Other Service Activities (-7.0%), 
  • Transportation and Storage (-3.0%), 
  • Accommodation and Food Service Activities (-2.0%) and 
  • Wholesale and Retail Trade (-0.8%)  

Oh, and do notice the 'Smart economy' bits... the Professional, Scientific and Technical Activities down -6.0% m/m and 14.3% y/y. And the area of growth in employment known as Accommodation and Food Service Activities down -2.0% y/y... this data is bizarre and will require confirmation once we have full quarter results to make any sense of... but one thing is clear: Irish Services PMI is just not that good at measuring anything that registers as Services sector in Ireland.

Thursday, September 5, 2013

5/9/2013: Irish Services Sector Activity Index: July 2013

Monthly Services Activity Index from the cSO is out for July. Some interesting movements in the series.


  • Wholesale and retail trade sub-sector activity expanded m/m on seasonally adjusted basis by 2.46% in July 2013, having posted a m/m decline of 1.49% back in June 2013. 3mo MA through July 2013 was down 2.19% on 3mo MA through July 2012 and 6mo MA is down 4.21% y/y.
  • Transport and storage sub-sector posted a m/m expansion of 1.86% in July 2013, following a contraction in June 2013 of 2.08%. 3mo MA is up 3.84% y/y and 6mo MA is up 4.36%.

  • Accommodation and food services sub-sector activity contracted 0.76% in July 2013 m/m, having posted an expansion of 1.06% in June 2013. 3mo MA is now up just 0.32% y/y and 6mo MA is up 1.27% y/y.
  • Administrative and support services sub-sector activity shrunk 1.24% m/m in July 2013, having posted 5.25% growth in June 2013. 3mo MA is now up a massive 23.76% y/y and 6mo MA is up 22.04%.


  • Information and communication sub-sector activity shrunk 4.01% m/m in July 2013, having posted growth of 1.71% in June. 3mo MA is now up 8.01% y/y and 6mo MA is up 9.23% y/y.
  • Professional, scientific and technical activities sub-sector is down 4.68% m/m in July, having posted an 1.74% expansion in June. 3mo MA is down 6.64% y/y and 6mo MA is down 3.23% y/y. 


Lastly, overall index:
  • Services sector activity fell 0.82% m/m in July after posting growth of 0.37% m/m in June 2013.
  • 3mo MA through July 2013 was up 2.73% y/y against previous 3mo period MA growth of 2.09% y/y.
  • 6mo MA is up 2.41% y/y.


 Overall, still solid performance in the Services sector, with monthly (seasonally adjusted) changes not exactly stellar, but gains of the previous months continue to carry the sector to annual expansion.

Wednesday, August 7, 2013

7/8/2013: Sunday Times, July 28, 2013: Ireland's Polarised Paralysed Economy

This is an unedited version of my article in the Sunday Times from July 28, 2013.


The latest news from the economy front both in Ireland and across the Euro area have been signaling some shallow improvements in growth outlook for the second and third quarters of 2013. However, the end game of a recovery currently building up will be a greater polarization of the real economy and little net new jobs creation. As supply of skills by indigenous workers remains mismatched to the demand for skills by exporting sectors, restart of exports-led growth of the future will not trickle down to the ordinary families. Meanwhile, long-term unemployment is hitting harder our older indigenous workers, and our entrepreneurship is in a structural decline. Responding to these problems will require a radical shift in the way we enable entrepreneurship, support professional labour mobility and increase investment in education and skills.


To see this, first consider the drivers for the latest improvements in the news flows. June Purchasing Managers’ Index (PMI) for Manufacturing in Ireland has finally reached just a notch above 50.0, signaling expansion for the first time since February 2013. Services PMI jumped to 54.9, marking 11th consecutive month of index readings above 50. Across the Euro area, Spanish Manufacturing PMI reached above 50 in June for the first time in 27 months. Italian PMI posted a rise for the third month in a row, although it remains below the expansion mark of 50.0. Germany's July composite PMI estimate for services and manufacturing hit a 17-month high at 52.8 and French estimate came in at 48.8 - an improvement on 47.4 in June.

Even though the end to the longest recession in euro area's history might be in sight, the recovery is unlikely to be strong. Euro area economies, Ireland included, genuinely lack sustainable drivers for growth. In addition, the processes of establishing new sources for future growth - new entrepreneurship and investment cycles – have been severely delayed both by the crises and by our policy responses to these crises.

In normal recessions, higher unemployment leads to higher involuntary entrepreneurship, as laid off workers deploy their skills and expertise into the market through self-employment and as sole-traders. In Ireland, in part due to tax hikes hitting the self-employed the hardest, this did not take place. According to the Enterprise Ireland report published earlier this month, the proportion of early stage entrepreneurs here has fallen from 8.1% average over 2003-2008 period to 6.1% in 2012. Ireland now ranks 18th out of 34 OECD countries in terms of entrepreneurship, just as the Government is expending millions on PR campaigns extolling the virtues of its pro-entrepreneurial policies and culture.

Beyond shrinking entrepreneurship, Irish labour markets are continuing to show signs of long-term, structural distress. The headline figures on Irish unemployment tell the story.

At the end of June 2013, there were 516,751 recipients of Live Register supports, including those in state and community training programmes. Some of the latter are involuntary in so far as they are linked to continued receipt of unemployment benefits. In June 2011, the same number was 517,187. The Government is boisterously claiming the economy is creating 2,000 new jobs per month. The same Government has spent hundreds of millions on enterprise supports and investment schemes, published series of programmes promising new jets in tens of thousands. Amidst this PR circus, the unemployment supports counts have declined by less than 500 over two years.

Based on the Quarterly National Household Survey data, we can take a more granular look into the jobs creation dynamics in the economy.

Between Q1 2011 and Q1 2013, the latest period for which data is available, total non-agricultural employment in the country fell by 9,200. In 12 months through March 2013, Irish economy added only 4,900 non-agricultural jobs. Some 19,000 shy of what our ministers in charge of jobs creation and enterprise policies allege. Controlling for health and education jobs, private sector saw destruction of 11,600 non-agricultural jobs since Q1 2011 when the Government came to power. Even in the booming Information and Communication services, overall employment fell by 1,100 in 12 months through Q1 2013, despite robust hiring in the exporting MNCs operating in the sector.

Underneath the surface, the trend is for displacement of Irish workers by age cohorts and by skills. This means that more and more foreign workers are taking up new positions created in sectors such as ICT and IFS to replace positions lost in domestic sectors. It also implies that older Irish workers are now being consigned to the risk of perpetual unemployment.

On the first point, while there is virtually no net new jobs additions in the economy, the positions that are being created to replace those being destroyed by the crisis, are getting progressively worse in terms of their quality. In the higher value-added private sectors, such as ICT services, professional, scientific, and technical activities, financial, insurance services and the likes, employment shrunk by 6,100 in Q1 2013 compared to Q1 2011 and by 900 compared to Q1 2012. Year on year there have been some 9,300 new jobs created in the top three professional occupations when ranked by earnings. However, more than half of these were part-time jobs. These are hardly the jobs that are attracting foreign talent into Ireland, suggesting that of the full time jobs in ICT and IFSC sectors created, the vast majority are taken up by non-Irish workers.

Regarding the last point, in June 2013, compared to June 2010, by age, the only cohort of Irish workers that saw a decline in Live Register numbers are those under the age of 35. All other age cohorts saw increases in Live Register participation. Between June 2010 and June 2013, numbers of long-term unemployed and underemployed rose 20% for workers under 35 years of age, 54% for workers of 35-54 years of age, and 106% for workers older than 55. In effect, we are currently assigning older workers to spend the rest of their working-age life in unemployment.

All of the above is best summed by the quarterly data on unemployment. At the end of March 2013, 25% of Irish workforce was either unemployed, underemployed or marginally-attached to the workforce, up on 23.7% in Q1 2011. Adding to the above those in state training schemes pushes the true broad unemployment rate in Ireland to 29% in Q1 2013, up on 26% in Q1 2011.


As I asserted at the top of the article, evidence shows that there is basically no net jobs creation going on in Ireland since Q1 2011. It further shows that older and predominantly Irish workers are experiencing an ever-rising risk of perpetual unemployment. Amongst the younger cohorts of workers, the main beneficiaries of the ICT and IFSC exporting sectors boom are temporary residents from abroad. Of the jobs still being added in the economy, majority are of low quality and cannot be relied upon to sustain long-term financial viability of Irish households. Lastly, skills mismatches between indigenous workers and exporting sectors demand are offering little hope that exports-led growth of the future will trickle down to ordinary families in Ireland.

The response to the above problem will have to be a structural shift in the way we support and treat entrepreneurship, professional labour mobility and investment in education and skills.

Currently, government policies overwhelmingly disfavor self-employed, indigenous entrepreneurs, and risk-taking professionals. In return, our policies promote development of tax optimizing FDI-backed large enterprises. Thus, early stage entrepreneurs face higher direct and indirect taxes than mature corporations and PAYE employees. Risk-taking, mobile, highly skilled professionals face lower quality and higher cost safety nets than immobile, old-skills-reliant tenured employees. Both mobile employees and entrepreneurs are also facing higher risks of unemployment, greater prospects of disruptive shocks to their incomes and larger exposure to health and family shocks. Meanwhile, for would-be entrepreneurs and flexible markets employees currently in underemployment or unemployment, life-long learning systems are costly to access and, with few exceptions, are of dubious quality.

These obstacles to increasing functional mobility of workers and human capital investments in our workforce can only be dealt with via a drastic, costly and disruptive reforms of our welfare system.  In part, the Government is currently attempting to undertake some of these reforms, albeit against the rising tide of internal discontent between the coalition partners.

But the current reforms proposals are not going far enough. Specifically, we will need to separate unemployment supports from general welfare and make these supports available to self-employed and flex-employment workers at no increase in cost of provision to these workers. The test for accessing all benefits – unemployment insurance and general welfare – should include skills levels and the entire past history of employment and entrepreneurship. Thus, higher unemployment supports should be given to those who have contributed more in the past in terms of taxes paid and entrepreneurship or human capital investment efforts undertaken. Conversely, they should have lower access to welfare benefits. To afford the strengthening of the safety net at the front end of unemployment, we will have to cut back the general social welfare benefits for able-bodied adults.

Parallel to these reforms we also need to change the way we do business in the areas such as childcare and life-long-learning. The goal of such reforms should be to increase access and supports for families at risk of unemployment in the 30-35 years of age and older cohorts. One possible long-term improvement would be to incentivize on-shoring of corporate training services into Ireland by the multinationals, coupled with requirement that such services take on a set percentage of Irish workers for training purposes and apprenticeships. Another reform can see greater and more strategic engagement of multinationals with indigenous entrepreneurs and SMEs.

A deep re-think of our current policies on dealing with unemployment requires breaking down traditional siloes in public policy and management that exist between various departments. The last two years – filled with good intentions and loud policies announcements show that the strategies deployed to-date are not working.






Box-out:

The latest data from the Residential Property Price Index (RPPI) shows that Dublin property prices posted a year on year price increase of 4.15% in June and a 1.69% cumulative rise over the last six months. However encouraging this might sound, the data must be treated with caution for a number of reasons. Firstly, the main driver for the latest improvement in the RPPI was sales of Dublin apartments. These are highly volatile and are based on few transactions. Secondly, outside Dublin, the markets remain weak. Thirdly, latest mortgages data shows that while borrowing posted a cautious rise in the first half of 2013, mortgages affordability is falling. Lastly, current sales levels and valuations are not pricing in the upcoming wave of foreclosures (starting with Buy-to-Let markets around Q4 2013 and running though 2014) that will be required to deleverage banks balance sheets. The fact is: in June 2013 the All-Properties RPPI, was still down 1.5% on Q1 2012 average and is basically unchanged on December 2012-January 2013 levels. In other words, while pockets of strength might emerge in Dublin market, overall property market is currently bouncing at the bottom of the negative cycle, looking for a catalyst either up or down.

Thursday, July 25, 2013

25/7/2013: Entrepreneurship in Ireland, 2012

Here's a recently published report on entrepreneurship in Ireland (data through 2012):  http://www.enterprise-ireland.com/EI_Corporate/en/Publications/Reports-Published-Strategies/GEM-Report-2012.pdf

Some points of note, quotes direct from the text, italics emphasis is mine:

"Less positive trends…….
  • The general perception of opportunities for new businesses by people in Ireland continues at historically low levels and is far below that pertaining across the OECD and EU.
  • The aspiration to become an entrepreneur remains low, and is far below that generally observed across the OECD and EU, at a time when the perceived need for entrepreneurs is greater than ever.
  • Fewer people are currently planning and starting new businesses in Ireland. This is particularly the case among men.
  • In respect of early stage entrepreneurs, Ireland’s position relative to other European countries has significantly declined.
  • The prevalence of early stage entrepreneurs in Ireland is at historically low levels and is half of what it is in the United States.
  • The level of early stage entrepreneurs that are motivated by necessity continues at a high rate.
  • A marked lowering of growth ambition may be observed among men starting new businesses.

More positive trends…..
  • Successful entrepreneurs continue to be well considered in Irish society, and success at entrepreneurship is considered to confer considerable status.
  • There is a growing general perception of supportive coverage by the media of entrepreneurs and their activities.
  • The educational attainment level among early stage entrepreneurs in Ireland is one of the highest internationally.
  • More than half of all early stage entrepreneurs are focused on overseas markets and many expect a significant number of customers to be from overseas markets.
  • The growth expectations among women entrepreneurs have considerably increased and there is no longer a significant gender gap in this area.
  • The prevalence of owner managers of established businesses in Ireland is higher than it is across the OECD and EU.
  • The level of growth expectation among early stage entrepreneurs remains at a high level."
Another point of interest: "Early stage entrepreneurship is higher among immigrant groups (7.2%) than it is among the non-immigrant population (5.8%) (Table L). This is the case in the other EU-15 countries, with the exception of the Netherlands. Immigrant early stage entrepreneurs are typically motivated by opportunity (73%), which is also the case for non-immigrant entrepreneurs (70%). More specifically, a higher percentage of first generation (3.0%) and second generation immigrants (2.9%) have recently started a business in Ireland, compared to the non-immigrant population (2.2%)."

Role of the recession: "Almost a third of those consulted identified the recession and continuing high rates of unemployment as fostering entrepreneurial activity. The view is that the high unemployment rate has reduced the fear of failure as a deterrent, as people have little to lose. The high unemployment level is forcing people to consider starting up. This point ties in with the continuing high levels of necessity entrepreneurship identified in the 2012 GEM research"

It is worth noting that involuntary entrepreneurship (due to lack of employment) is usually associated with poorer business outcomes.

On funding side: "Informal investors play a vital role in the development of new businesses. In Ireland in 2012, 3.7% of adults reported having provided funds in the past three years (June 2009 to June 2012) to a new business started by someone else. This rate was broadly similar to that reported in 2011 (3.2%). Informal investment is more pervasive in the US (5.4%), across the OECD (4.6%) and the EU-27 (4.5%). The rate in Ireland is more on a par with the EU-15 average (3.4%). The great majority (81%) of the 36,000 individuals, who provided funds as informal investors in Ireland in 2012, provided them to family, friends or work colleagues. Instances of providing investment to entrepreneurs unknown to the investor were much less common (19%)."

Some summary stats:


Thursday, July 4, 2013

4/7/2013: Irish Services Sector Activity Index: May 2013

Irish Services Index for May was out today, so here are the updated trends.

Wholesale Trade activity rose from 114.7 to 116.7 between April and May 2013, with index up 1.74% m/m having posted a 7.9% rise m/m in April. 3mo average through May 2013 is down on 3mo average through May 2012 by some 7.45% and 6mo average through May 2013 is down 6.47% y/y. Thus, two last months' readings are encouraging, but not yet enough to reverse overall slower activity recorded y/y.

Wholesale and Retail Trade and Repair of Motor Vehicles etc sector activities also improved m/m in May 2013, rising 1.22% after posting a 3.61% rise m/m in April. 3mo average through May 2013 is down 5.27% y/y and 6mo average through May 2013 is down 4.22% y/y. Relative to historical max (history here references period from January 2009), the index is still down 4.27%

Transport and Storage sector is up 1.49% m/m in May 2013 having posted a 1.06% increase in April 2013. 3mo average through May 2013 is up 5.79% y/y and 6mo average is up 6.62% y/y. Relative to historical max, the index is down 5.84%.


Accommodation and Food services activity dipped 0.58% m/m in May, having recorded a 3.38% drop in April. 3mo average through May is still up 1.40% y/y and 6mo average is up 1.72% y/y. The sector is down 17.78% on peak for the period from January 2009.

Administrative & Support services activity rose 0.68% m/m in May, having recorded a 2.42% rise in April. 3mo average through May is still up 20.67% y/y and 6mo average is up 18.06% y/y. The sector is currently at a peak for the period from January 2009.


Information & Communication services activity dipped 3.23% m/m in May, having recorded a 2.11% drop in April. 3mo average through May is still up 10.31% y/y and 6mo average is up 7.72% y/y. The sector is down 5.28% on peak for the period from January 2009.

Professional, Scientific and Technical services activity dropped 4.40% m/m in May, having recorded a 0.11% decline in April. 3mo average through May is down 3.72% y/y and 6mo average is down 4.34% y/y. The sector is down 35.0% on peak for the period from January 2009.


Overall services sector activity declined 0.74% m/m in May, having recorded a 1.21% expansion in April. 3mo average through April 2013 was up 1.83% y/y and this improved to 2.31% growth for 3mo average through May 2013. 6mo average through May 2013 was up 1.72% y/y. Relative to peak, overall services activity is down 1.64%.


Tuesday, June 11, 2013

11/6/2013: Irish Services Index: April 2013

Good news is: on an annual basis, per CSO, in April 2013:

  • Administrative and Support Service Activities rose +21.3%, 
  • Information and Communication went up +15.4%, 
  • Other Service Activities +4.2%, 
  • Transportation and Storage +1.4% and 
  • Accommodation and Food Service Activities (+0.3%) increased 
On bad news front:
  • Wholesale and Retail Trade were down -4.2% and 
  • Professional, Scientific and Technical Activities fell -0.6%.
The seasonally adjusted monthly services value index increased by 1.2% in  April 2013 when compared with March 2013 and there was an annual increase of 4.1%.

As you would know, I am not covering Services PMIs anymore, as these are no longer being released in any useful data format (Markit has decided to exclude reporting of actual levels of sub-components for PMIs, preferring to practically give instead its analysts personal opinion about these levels). 

However, I will continue reporting CSO data.

So here's more detailed analysis:
  • Wholesale Trade sub-index rose from 106 in March to 114.1 in April, marking a 7.64% rise m/m and a decline of 4.68% y/y. 3mo MA through April 2013 stood at 110.23, down on 116.67 3mo MA through January 2013 and down sharply on 122.07 3mo MA through April 2012. 6mo MA through April 2013 is at 113.45, down on 121.10 6mo MA through April 2012.
  • Wholesale and Retail Trade, repair of vehicles sub-index improved from 102.3 in March 2013 to 105.7 in April 2013 (+3.32%), but the index is down 4.17% on April 2012. 3mo MA through April 2013 is at 104.3 against 3mo MA through April 2012 at 111.27; 6mo MA through April 2013 is at 106.32 against 6mo MA through April 2012 at 110.80.
  • Transport & Storage sub-index is at 113.4 in April 2013 up marginally (+0.62%) m/m and up 1.43% y/y. 3mo MA through April 2013 is at 111.83 up on year ago 3mo MA of 106.83. 6mo MA through April 2013 is at 111.18, up on 6mo MA through April 2012 at 106.73.


  • Accommodation & Food Services slipped from 105.9 in March 2013 to 102.7 in April 2013 (-3.02%) and the index is up only 0.29% y/y. 3mo MA through April 2013 is at 103.2, which is up on 3mo MA through April 2012 at 101.2. Similarly, 6mo MA through April 2013 is at 103.77 which is up on previous year level of 101.3.
  • Much of the improvements in the above sector was driven by rising value of food services, up 3.51% y/y. Accommodation services actually fell 1.35% y/y and were down 9.07% m/m.
  • Administrative and support services activity also improved m/m (+1.66%) and rose strongly by +21.31% y/y. Huge gains were recorded in the activity on 3mo MA basis y/y and 6mo MA y/y basis. I have no explanation to this other than possibly reclassification of some activities into this category, plus boom in on-line services centres in Dublin (much of google and other ICT services firms activities here relate to support and admin, rather than R&D or professional work).



  • ICT services continue to boom, rising 15.42% y/yin April, although slipping 1.59% m/m from the historical record-breaking levels in March 2013. on 3mo MA basis, April 2013 stood at 122.13 strongly up on previous year levels of 109.87. On 6mo MA basis, April 2013 came in at 120.42, up on 110.42 a year ago.
  • In contrast to ICT services and Admin services, Professional, scientific and technical activities index declined for the third month in a row, falling to 91.0 in April 2013 from 91.2 in March 2013 (-0.22%) and is marginally lower (-0.55%) y/y. 3mo MA through April 2013 is at 91.4 and it is virtually flat on 3mo MA through April 2012 (91.2). 6mo MA through April 2014 at 91.0 is down on 94.5 6mo MA through April 2012.



  • Overall Services sector activity index rose 1.21% m/m from 107.7 in March 2013 to 109.0 in April 2013, and is up 4.11% y/y. 3mo MA through April 2013 is at 107.63 which compares marginally positively against 105.4 3mo MA a year ago. 6mo MA through April 2013 is at 107.62, also marginally up on 105.47 6mo MA through April 2012. However, 3mo MA through April 2013 was identical to 3mo MA through January 2013, implying zero growth, and 6mo MA through April 2013 was slightly ahead of 6mo MA through October 2013 (107.6 relative to 105.9).


Tuesday, May 7, 2013

7/5/2013: Irish Services Index, Q1 2013 data

Irish Services Index is out today for Q1 2013 and here are some details (monthly data analysis to follow). Keep in mind, data only starts from Q1 2009, so when referencing current levels of activity to peak, that refers to peak from Q1 2009 and not relative to pre-crisis activity.

  • Value in Wholesale & Retail Trade, Repair of Motor Vehicles & Motorcycles sector declined in Q1 2013 to 105.2 q/q (down 3.22% from 108.7 in Q4 2012) and is down 5.40% y/y. Q4 2012 value index was down 1.36% y/y, so things are getting worse faster. Relative to peak (since 2009 Q1 data start) the index is now down 5.40%. 
  • Value index for Transportation and Storage sector slipped marginally from 110.5 in Q4 2012 to 110.0 in Q1 2013 (-0.45% q/q) and is up 5.97% y/y. However, rate of annual growth declined in Q1 2013 compared to Q4 2012 when it stood at 8.97%. Relative to peak the index is still down 9.39%.
  • Accommodation and food services activities index also slipped marginally from 104.7 in Q4 2012 to 104.3 in Q1 2013 (down 0.38% q/q). Y/y index is up 3.48% in Q1 2013 and this is a slight gain on 3.05% y/y growth in Q4 2012. However, relative to peak index reading is still down 14.86%.


  • Information and communication sector index remained practically flat in Q1 2013 in q/q terms at 116.6 which is only 0.09% up on 116.5 in Q4 2012. Y/y index is up 3.83% and this shows deceleration in growth from +8.47% growth posted in Q4 2012. Despite this, Q1 2013 marks the peak of activity in this sector for any quarter since Q1 2009.
  • In contrast with ICT sector activity, the knowledge economy core services sub-sector, Professional, scientific and technical activities index has suffered steep declines since 2009. In Q1 2013 the index stood at 91.2 (up 0.22% q/q) up only 0.55% y/y. This marks a minor reversal of a significant decline of -8.36% recorded in 12 month through Q4 2012. The index is down massive 29.14% on peak.



  • Administrative and support service activities index has been a surprising performer during the crisis. In Q4 2012 it stood at 104.7 and Q1 2013 this increased to 110.4 a gain of 5.44% q/q. Index is now up 20.92% y/y and this compounds 11.38% y/y growth recorded in Q4 2012. Q1 2013 marks the peak quarter on record for the sub-sector.
  • Overall services index slipped from 107.2 in Q4 2012 to 106.2 in Q1 2013 (-0.93% q/q), although activity is still up 0.85% y/y. Y/y growth in Q1 2013 marks a slowdown from 2.19% y/y expansion in Q4 2012. The index overall is 0.93% below the peak and is currently running slightly behind the level of activity recorded in Q1 2009.


Overall, quarterly data shows weakening in Services sectors performance, and stripping out the effects of ICT (dominated by tax transfers-booking MNCs), Services side of the economy is showing weaknesses that are alarming. Recall that exports of services growth in 2010-2012 acted to compensate for declines in domestic demand and weaker growth (turning negative) in exports of goods. Should Services activity continue to suffer even modest declines, our GDP and GNP growth will be impaired. 

To see more forward-looking data, read my analysis of Services PMI for April: http://trueeconomics.blogspot.ie/2013/05/352013-irish-services-pmi-april-2013.html

Sunday, April 7, 2013

7/4/2013: Irish Services Activity Index - February 2013


Irish Services activity fell in February 2013 per latest CSO data, marking second consecutive month of decline. In February 2013, Irish services index dropped 1.03% m/m and was down 0.45% y/y. The index 3mo MA is now at 106.43, only slightly ahead of 106.07 in 3mo period through November 2012, and still ahead of 105.43 3mo MA through February 2012. The same dynamics are repeated at the 6mo MA level.



Largest m/m declines were recorded in Wholesale Trade (-7.17% m/m and down 10.71% y/y), Accommodation & Food Services (-1.89% m/m and down 0.69% y/y). Largest m/m increases were in Administrative & Support Services (+2.95% m/m and up 15.74% y/y) and in Professional, Scientific & Technical Activities (+1.68% m/m and 2.02% y/y). 
In annualised terms, largest increases were recorded in Administrative & Support Services (+15.74% y/y), Accommodation Services (+6.92% y/y) and Transport & Storage (+5.61%).





One interesting point in terms of longer range analysis:


As chart above shows, the PMI data for Services Activity continues to bear no relations to the actual Services Activity Index measurements. Recall that in January and February, Services Activity Index posted two consecutive declines in activity. Over the same months, PMI for Services posted robust growth signals at 56.8 in january and 53.6 in February.

Monday, March 11, 2013

11/3/2013: Irish Services Activity: January 2013

In an earlier post I covered annual figures for Services Index for Ireland (link here). Today's release from CSO also provides data for January 2013 (monthly series) and here is the detailed analysis of shorter-term series.


  • Wholesale Trade activity index rose in January 10 118.8 from December 2012 level of 115.2 (+3.13% m/m). The index is down 1.49% y/y. 3mo average is at 117.23 up on previous 3mo average of 115.93, but down on 3mo average through January 2012 which stood at 120.47. 6mo average is 116.6 against previous 6mo average of 120.9 and a year ago 6mo average of 119.9. Thus, at 3mo average activity through January 2013 is slower than through January 2012. Ditto for 6mo average.
  • Wholesale & Retail Trade, Repair of Motor Vehicles and Motorcycles activity index increased to 108.9 in January 2013 - up 1.02% m/m, but down 1.27% y/y. 3mo average through January 2013 is static compared to 3mo average through October 2012 and is down on 3mo average through January 2012. 6mo average through January 2013 is down on 6mo average through July 2012 and down on 6mo average through January 2012. Slowdown in the broader category, therefore, is more pronounced and stretched over the last 12 months than in Wholesale Trade alone.
  • Transport & Storage services activity index dipped from 112.1 in December 2012 to 111.5 in January 2013, a decline of 0.54% m/m. However, the index is up 10.29% y/y. 3mo average is statistically indifferent in 3mo through January 2013 (111.3), as in 3 mo through October 2012 (111.9), but is significantly ahead of 3mo through January 2012 (101.2). 6mo average through January 2013 (111.62) is ahead of 6mo average through July 2012 and ahead of 6mo average through January 2012.
  • Accommodation & Food services index declined in January 2013 to 103.5, down 1.33% m/m and marked second consecutive monthly decline. The index is up 2.38% in y/y terms. 3mo average through January 2013 is at 104.6, which is lower than 3mo average though October 2012 (105.63) but above 3mo average through January 2012 (101.6). On 6mo average basis activity through January 2013 was ahead of activity through July 2012 which itself was ahead of activity in 6 months through January 2012.
  • Information & Communication services activity declined in January 2013 from 121.7 in December 2012 to 119.8 (decline of 1.56% m/m) although activity was strongly up (+11.76%) on January 2012. 3mo average through January 2013 was at 118.7, well above 3mo average through October 2012 (112.23) and 3mo average through January 2012 (108.43). Similar increases are traceable to 6mo averages.
  • Professional, Scientific & Technical activities index rose to 90.2 in January from 89.4 in December 2012 (+0.89% m/m) although the index is down 1.85% y/y. 3mo average through January 2013 is at 90.53, ahead of 3mo average through October 2012 (87.83), but behind 3mo average through January 2012 (98.13). Similar dynamics can be traced across 6mo averages.
  • Administrative & Support services index rose strongly from 100.7 in December 2012 to 104.2 in January 2013 (+3.48% m/m). The index is up incredible 19.63% y/y and I am at a loss as to how this can be explained given the current economic environment and fiscal consolidation. on 6mo average basis index is up from 91.88 average for 6mo through January 2012 to 102.63 average for 6mo through January 2013.
Charts to illustrate:



  • Total services activity inched up to 107.9 in January 2013 from 107.7 in December 2012. Year on year, the index clocked a rise of 4.35%. 3mo average through January 2013 was at 107.57 - ahead of 3mo average a year before (105.73).

Despite these above improvements, overall services activity remains below the long-term recovery trend, albeit, owing to the strength of Wholesale Trade and ICT sectors (see the annual data analysis for these) and to the surprise uptick in Admin & Support services, the sector is tracing a shallow U-shaped recovery path so far. From January 2009, it took the index 16 months to hit the bottom, and we are 32 months into the recovery now, with still 1.55% to go (1.86% on 3mo average basis) before regaining January 2009 levels of activity. We will, barring unexpected events, close this gap in the next 2-3 months, but do keep in mind that January 2009 was already 1 year into contracting services activity in the first place.

11/3/2013: Irish Services Sectors Activity in 2012

Data for 2012 end of the year index of activity in Irish Services sectors is out and before I cover monthly data for January 2013, here are some annual results:

  • Wholesale trade services activity expanded 4.03% in 2011-2012, after growing 14.2% in 2010-2011. In 2012 the sub-sector activity was up 31.6% on 2009 and up 18.8 on 2010 making this the fastest growing sub-sector in all Irish services since 2009.
  • Wholesale and retail trade, repairs of motor vehicles and motorcycles sub-sector activity grew 2.24% in 2012 compared to 2011 after having expanded 7.2% in 2010-2011. Over 2009-2012 the sub-sector activity grew incredible 14.6% all of which was driven solely by growth in wholesale trade, offset by shrinkages in retail and other sub-sector activities.
  • Transportation and storage sub-sector activity expanded 5.39% in 2011-2012 period, having grown at 3.8% in 2010-2011 period. Since 2009 through 2012 sub-sector activity shrunk by 1.88%.
  • Accommodation and food services activities expanded at 2.27% in 2011-2012, following growth of 1.4% in 2010-2011 period. Between 2009 and the end of 2012, sub-sector activity was down 6.74%. Accommodation sub-sector alone grew 2.18% in 2011-2012 after posting growth of 5.4% in 2010-2011 and the index is on the aggregate still down 3.67% on 2009. Bizarrely, Food services activities grew since 2009 through 2012 at 1.76%, and this sub-sector posted expansion of 6.80% in 2011-2012 that followed growth of 2.9% in 2010-2011 period.
  • Information and Communication sub-sector activity was the star of the show in 2011-2012, rising 8.40% on foot of 3.6% growth in 2010-2011. The sub-sector is now up 20.11% on 2009 making this the second fastest growing sub-sector in Irish services after Wholesale trade.
  • Professional, scientific & technical activities sub-sector activity was the worst performing sub-sector in 2011-2012, shrinking 10.39%. This followed growth of 1.1% in 2010-2011. The sub-sector activity is now down 23.80% on 2009 making it overall the worst performing sub-sector, even worse than the Services (68, 92 to 96) sub-sector described below.
  • Administrative and support services activity sub-sector clearly doesn't have much in common with the sub-sectors that usually require significant admin & support (e.g. professional, scientific and technical areas of activities) as it posted an robust growth rate of 7.54% in 2011-2012, albeit on foot of strong contraction of 7.2% in 2010-2011 period.The sub-sector activity is cumulatively up 2.67% on 2009. Either Irish exports are becoming more bureaucratised to warrant increases in Admin & supports, or there's some sort of substitution from shrinking public sector employment to temps and outsourced services. Otherwise, why on earth would an economy in a deep slowdown post growth in this category on 2009 figures?
  • Services (68, 92 to 96) encompassing Real Estate activities, Gambling and betting activities and Other personal service activities were down 3.48% in 2011-2012, following virtually zero (+0.7%) expansion in 2010-2011. The grouping is down 19.67% on 2009 levels of activity.

Overall, for all services covered in the CSO data, sector growth clocked at 2.52% in 2011-2012 period, down from 3.3% growth in 2010-2011. Not a good sign, but better than posting negative growth, I guess. Compared to 2009, sector activity is up miserly 3.52%. And that is despite increases in R&D spending, massive hikes in availability of state-financed VC and angel investment (via Enterprise Ireland), big-time focus on incentives (including tax incentives) in 'key' sectors etc. Not exactly an achievement to brag about, but, again, could have been worse.

Here's another interesting chart:


As I mentioned above, Professional, scientific & technical activities sub-sector activity was down 23.80% on 2009 making it overall the worst performing sub-sector in all services sectors covered. Which isn't going well with the claims we keep hearing about our 'knowledge economy' and 'smart economy' and the rest of the hoopla surrounding branding like 'Innovation Island'. Looks like stripping ICT, there is not much of 'knowledge'-intensive trading going on out there. And we take out IFSC, the whole landscape of 'knowledge-based economy' might just as well start resembling a veritable desert? Instead, the 'traditional' (aka not 'smart' according to our Government policies priorities) wholesale trade is driving the sector activity, plus the 'smart' ICT sector.

And one last point. Here's the Services PMI data for Ireland for the period covered above in the index (see latest data here: http://trueeconomics.blogspot.ie/2013/03/533013-irish-services-pmis-february-2013.html) ...

Strange that a lift-off in PMI from ca 35 average in 2009 to 52 average in 2012 should be translating into only 3.5% increase in actual services activity, no? Sort of suggests something bizarre going on in PMI data, right? Hello, Markit!.. Station Earth paging...